Corporate restructuring 31 st  October 2009
Valuation Techniques Market based methodologies Intrinsic valuation measures Relative company valuation Discounted Cash Fl...
Adjusted Book Value <ul><li>Valuation approach based on the market value of assets and liabilities held by a company </li>...
Dividend Valuation <ul><li>Valuation approach based on capitalising the dividend streams received by an investor and expec...
Relative company valuation
Relative company valuation
 
 
 
 
 
 
 
 
 
Some exercise <ul><li>Trailing and forward multiples </li></ul><ul><li>Outliers </li></ul>
 
 
 
 
 
 
 
DCF Approach <ul><li>Valuation approach based on discounting projected cashflows to today’s values </li></ul><ul><li>By fa...
DCF Approach <ul><li>DCF approach is based on FCF – cash flow available to debt and equity investors  </li></ul><ul><li>EB...
Valuation Road Map What are we valuing? Mainly asset based company? Minority Shareholding?  Y N Adjusted book value Consis...
M&A
Distinction between Mergers and Acquisitions    <ul><li>Although they are often uttered in the same breath and used as tho...
Mergers <ul><li>Type of mergers:  Mergers appear in three forms, based on the competitive relationships between the mergin...
Synergy <ul><li>It is the magic force that allows for enhanced cost efficiencies of the new business. Synergy takes the fo...
Doing the deal <ul><li>Start with an offer or begins with the acquiring company carefully  and discreetly buying up shares...
Doing the deal <ul><li>When a company is on offer? </li></ul>
Regulatory Issues <ul><li>MRTP : Monopolies and Restrictive Trade Practices Act </li></ul><ul><li>- Historically, competit...
Three Stages of a Merger
Reasons for failure <ul><li>Excessive premium </li></ul><ul><li>Size Issues </li></ul><ul><li>Lack of research </li></ul><...
Reasons for failure <ul><li>Poorly Managed Integration </li></ul><ul><li>Failure to Set the Pace for Integration </li></ul...
Upcoming SlideShare
Loading in …5
×

31st Oct Complete

924 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
924
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
56
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • 1. Excessive premium In a competitive bidding situation, a company may tend to pay more. Often highest bidder is one who overestimates value out of ignorance. Though he emerges as the winner, he happens to be in a way the unfortunate winner. This is called winners curse hypothesis. When the acquirer fails to achieve the synergies required compensating the price, the M&amp;As fails. More you pay for a company, the harder you will have to work to make it worthwhile for your shareholders. When the price paid is too much, how well the deal may be executed, the deal may not create value. 2. Size Issues A mismatch in the size between acquirer and target has been found to lead to poor acquisition performance. Many acquisitions fail either because of &apos;acquisition indigestion&apos; through buying too big targets or failed to give the smaller acquisitions the time and attention it required. 3. Lack of research Acquisition requires gathering a lot of data and information and analyzing it. It requires extensive research. A carelessly carried out research about the acquisition causes the destruction of acquirer&apos;s wealth. 4. Diversification Very few firms have the ability to successfully manage the diversified businesses. Unrelated diversification has been associated with lower financial performance, lower capital productivity and a higher degree of variance in performance for a variety of reasons including a lack of industry or geographic knowledge, a lack of focus as well as perceived inability to gain meaningful synergies. Unrelated acquisitions, which may appear to be very promising, may turn out to be big disappointment in reality. 5. Previous Acquisition Experience While previous acquisition experience is not necessarily a requirement for future acquisition success, many unsuccessful acquirers usually have little previous acquisition experience. Previous experience will help the acquirers to learn from the previous acquisition mistakes and help them to make successful acquisitions in future. It may also help them by taking advice in order to maximize chances of acquisition success. Those serial acquirers, who possess the in house skills necessary to promote acquisition success as well trained and competent implementation team, are more likely to make successful acquisitions. 6. Poor Cultural Fits Cultural fit between an acquirer and a target is one of the most neglected areas of analysis prior to the closing of a deal. However, cultural due diligence is every bit as important as careful financial analysis. Without it, the chances are great that M&amp;As will quickly amount to misunderstanding, confusion and conflict. Cultural due diligence involve steps like determining the importance of culture, assessing the culture of both target and acquirer. It is useful to know the target management behavior with respect to dimensions such as centralized versus decentralized decision making, speed in decision making, time horizon for decisions, level of team work, management of conflict, risk orientation, openness to change, etc. It is necessary to assess the cultural fit between the acquirer and target based on cultural profile. Potential sources of clash must be managed. It is necessary to identify the impact of cultural gap, and develop and execute strategies to use the information in the cultural profile to assess the impact that the differences have. 8. Poor Organization Fit Organizational fit is described as &amp;quot;the match between administrative practices, cultural practices and personnel characteristics of the target and acquirer. It influences the ease with which two organizations can be integrated during implementation. Mismatch of organization fit leads to failure of mergers. 10. Striving for Bigness Size no doubt is an important element for success in business. Therefore there is a strong tendency among managers whose compensation is significantly influenced by size to build big empires. Size maximizing firms may engage in activities, which have negative net present value. Therefore when evaluating an acquisition it is necessary to keep the attention focused on how it will create value for shareholders and not on how it will increase the size of the company. 11. Faulty evaluation At times acquirers do not carry out the detailed diligence of the target company. They make a wrong assessment of the benefits from the acquisition and land up paying a higher price. 12.   Poorly Managed Integration Integration of the companies requires a high quality management. Integration is very often poorly managed with little planning and design. As a result implementation fails. The key variable for success is managing the company better after the acquisition than it was managed before. Even good deals fail if they are poorly managed after the merger. 13. Failure to Take Immediate Control Control of the new unit should be taken immediately after signing of the agreement. ITC did so when they took over the BILT unit even though the consideration was to be paid in 5 yearly installments. ABB put new management in place on day one and reporting systems in place by three weeks. 14. Failure to Set the Pace for Integration The important task in the merger is to integrate the target with acquiring company in every respect. All function such as marketing, commercial; finance, production, design and personnel should be put in place. In addition to the prominent persons of acquiring company the key persons from the acquired company should be retained and given sufficient prominence opportunities in the combined organization. Delay in integration leads to delay in product shipment, development and slow down in the company&apos;s road map. Acquisition of Scientific Data Corporation by Xerox in 1969 and AT&amp;T&apos;s acquisition of computer maker NCR Corporation in 1991 were troubled deals, which resulted in large write offs. The speed of integration is extremely important because uncertainty and ambiguity for longer periods destabilizes the normal organizational life. 15. Incomplete and Inadequate Due Diligence Lack of due diligence is lack of detailed analysis of all important features like finance, management, capability, physical assets as well as intangible assets results in failure. ISPAT Steel is a corporate acquirer that conducts M&amp;A activities after elaborate due diligence. 16. Ego Clash Ego clash between the top management and subsequently lack of coordination may lead to collapse of company after merger. The problem is more prominent in cases of mergers between equals. 17. Merger between Equals Merger between two equals may not work. The Dunlop Pirelli merger in 1964, which created the world&apos;s second largest tier company, ended in an expensive divorce. Manufacturing plants can be integrated easily, human beings cannot. Merger of equals may also create ego clash. 18. Over Leverage Cash acquisitions results in the acquirer assuming too much debt. Future interest cost consumes too great a portion of the acquired company&apos;s earnings (Business India 2005). 19. Incompatibility of Partners Alliance between two strong companies is a safer bet than between two weak partners. Frequently many strong companies actually seek small partners in order to gain control while weak companies look for stronger companies to bail them out. But experience shows that the weak link becomes a drag and causes friction between partners. A strong company taking over a sick company in the hope of rehabilitation may itself end up in liquidation. 20. Limited Focus If merging companies have entirely different products, markets systems and cultures, the merger is doomed to failure. Added to that as core competencies are weakened and the focus gets blurred the fallout on bourses can be dangerous. Purely financially motivated mergers such as tax driven mergers on the advice of accountant can be hit by adverse business consequences. The Tatas for example, sold their soaps business to Hindustan Lever. 21. Failure to Get Figures Audited It would be serious mistake if the takeovers were concluded without a proper audit of financial affairs of the target company. Though the company pays for the assets of the target company, it also assumes responsibility to pay all the liabilities. Areas to look for are stocks, salability of finished products, receivables and their collectibles, details and location of fixed assets, unsecured loans, claims under litigation, loans from the promoters, etc. When ITC took over the paperboard making unit of BILT near Coimbatore, it arranged for comprehensive audit of financial affairs of the unit. Many a times the acquirer is mislead by window-dressed accounts of the target. 22. Failure to Get an Objective Evaluation of the Target Company&apos; Condition Risk of failure will be minimized if there is a detailed evaluation of the target company&apos;s business conditions carried out by the professionals in the line of business. Detailed examination of the manufacturing facilities, product design features, rejection rates, and distribution systems, profile of key people and productivity of the workers is done. Acquirer should not be carried away by the state of the art physical facilities like a good head quarters building, guest house on a beach, plenty of land for expansion, etc. 23. Failure of Top Management to Follow-Up After signing the M&amp;A agreement the top management should not sit back and let things happen. First 100 days after the takeover determine the speed with which the process of tackling the problems can be achieved. Top management follow-up is essential to go with a clear road map of actions to be taken and set the pace for implementing once the control is assumed. 24. Mergers between Lame Ducks Merger between two weak companies does not succeed either. The example is the Stud backer- Packard merger of 1955 when two ailing carmakers joined hands. By 1964 both companies were closed down. 25. Lack of Proper Communication Lack of proper communication after the announcement of M&amp;As will create lot of uncertainties. Apart from getting down to business quickly companies have to necessarily talk to employees and constantly. Regardless of how well executives communicate during a merger or an acquisition, uncertainty will never be completely eliminated. Failure to manage communication results in inaccurate perceptions, lost trust in management, morale and productivity problems, safety problems, poor customer service, and defection of key people and customers. It may lead to the loss of the support of key stakeholders at a time when that support is needed the most. 26. Failure of Leadership Role Some of the role leadership should take seriously are modeling, quantifying strategic benefits and building a case for M&amp;A activity and articulating and establishing high standard for value creation. Walking the talk also becomes very important during M&amp;As. 27. Inadequate Attention to People Issues Not giving sufficient attention to people issues during due diligence process may prove costly later on. While lot of focus is placed on the financial and customer capital aspects, not enough attention is given to aspects of human capital and cultural audit. Well conducted HR due diligence can provide very accurate estimates and can be very critical to strategy formulation and implementation. 28. Strategic Alliance as an Alternative Strategy Another feature of 1990s is the growth in strategic alliances as a cheaper, less risky route to a strategic goal than takeovers. 30. Loss of Identity Merger should not result in loss of identity, which is a major strength for the acquiring company. Jaguar&apos;s car image dropped drastically after its merger with British Leyland. 31. Diverging from Core Activity In some cases it reduces buyer&apos;s efficiency by diverting it from its core activity and too much time is spent on new activity neglecting the core activity. 32.   Expecting Results too quickly Immediate results can never be expected except those recorded in red ink. Whirlpool ran up a loss $100 million in its Philips white goods purchase. R.P.Goenk&apos;s takeovers of Gramaphone Company and Manu Chhabria&apos;s takeover of Gordon Woodroffe and Dunlops fall under this category.
  • 1. Excessive premium In a competitive bidding situation, a company may tend to pay more. Often highest bidder is one who overestimates value out of ignorance. Though he emerges as the winner, he happens to be in a way the unfortunate winner. This is called winners curse hypothesis. When the acquirer fails to achieve the synergies required compensating the price, the M&amp;As fails. More you pay for a company, the harder you will have to work to make it worthwhile for your shareholders. When the price paid is too much, how well the deal may be executed, the deal may not create value. 2. Size Issues A mismatch in the size between acquirer and target has been found to lead to poor acquisition performance. Many acquisitions fail either because of &apos;acquisition indigestion&apos; through buying too big targets or failed to give the smaller acquisitions the time and attention it required. 3. Lack of research Acquisition requires gathering a lot of data and information and analyzing it. It requires extensive research. A carelessly carried out research about the acquisition causes the destruction of acquirer&apos;s wealth. 4. Diversification Very few firms have the ability to successfully manage the diversified businesses. Unrelated diversification has been associated with lower financial performance, lower capital productivity and a higher degree of variance in performance for a variety of reasons including a lack of industry or geographic knowledge, a lack of focus as well as perceived inability to gain meaningful synergies. Unrelated acquisitions, which may appear to be very promising, may turn out to be big disappointment in reality. 5. Previous Acquisition Experience While previous acquisition experience is not necessarily a requirement for future acquisition success, many unsuccessful acquirers usually have little previous acquisition experience. Previous experience will help the acquirers to learn from the previous acquisition mistakes and help them to make successful acquisitions in future. It may also help them by taking advice in order to maximize chances of acquisition success. Those serial acquirers, who possess the in house skills necessary to promote acquisition success as well trained and competent implementation team, are more likely to make successful acquisitions. 6. Poor Cultural Fits Cultural fit between an acquirer and a target is one of the most neglected areas of analysis prior to the closing of a deal. However, cultural due diligence is every bit as important as careful financial analysis. Without it, the chances are great that M&amp;As will quickly amount to misunderstanding, confusion and conflict. Cultural due diligence involve steps like determining the importance of culture, assessing the culture of both target and acquirer. It is useful to know the target management behavior with respect to dimensions such as centralized versus decentralized decision making, speed in decision making, time horizon for decisions, level of team work, management of conflict, risk orientation, openness to change, etc. It is necessary to assess the cultural fit between the acquirer and target based on cultural profile. Potential sources of clash must be managed. It is necessary to identify the impact of cultural gap, and develop and execute strategies to use the information in the cultural profile to assess the impact that the differences have. 7. Poor Organization Fit Organizational fit is described as &amp;quot;the match between administrative practices, cultural practices and personnel characteristics of the target and acquirer. It influences the ease with which two organizations can be integrated during implementation. Mismatch of organization fit leads to failure of mergers. 8. Striving for Bigness Size no doubt is an important element for success in business. Therefore there is a strong tendency among managers whose compensation is significantly influenced by size to build big empires. Size maximizing firms may engage in activities, which have negative net present value. Therefore when evaluating an acquisition it is necessary to keep the attention focused on how it will create value for shareholders and not on how it will increase the size of the company. 9.   Poorly Managed Integration Integration of the companies requires a high quality management. Integration is very often poorly managed with little planning and design. As a result implementation fails. The key variable for success is managing the company better after the acquisition than it was managed before. Even good deals fail if they are poorly managed after the merger. 10. Failure to Set the Pace for Integration The important task in the merger is to integrate the target with acquiring company in every respect. All function such as marketing, commercial; finance, production, design and personnel should be put in place. In addition to the prominent persons of acquiring company the key persons from the acquired company should be retained and given sufficient prominence opportunities in the combined organization. Delay in integration leads to delay in product shipment, development and slow down in the company&apos;s road map. Acquisition of Scientific Data Corporation by Xerox in 1969 and AT&amp;T&apos;s acquisition of computer maker NCR Corporation in 1991 were troubled deals, which resulted in large write offs. The speed of integration is extremely important because uncertainty and ambiguity for longer periods destabilizes the normal organizational life. 11. Ego Clash Ego clash between the top management and subsequently lack of coordination may lead to collapse of company after merger. The problem is more prominent in cases of mergers between equals. Merger between two equals may not work. The Dunlop Pirelli merger in 1964, which created the world&apos;s second largest tier company, ended in an expensive divorce. Manufacturing plants can be integrated easily, human beings cannot. Merger of equals may also create ego clash. 12. Over Leverage Cash acquisitions results in the acquirer assuming too much debt. Future interest cost consumes too great a portion of the acquired company&apos;s earnings (Business India 2005). 13. Lack of Proper Communication Lack of proper communication after the announcement of M&amp;As will create lot of uncertainties. Apart from getting down to business quickly companies have to necessarily talk to employees and constantly. Regardless of how well executives communicate during a merger or an acquisition, uncertainty will never be completely eliminated. Failure to manage communication results in inaccurate perceptions, lost trust in management, morale and productivity problems, safety problems, poor customer service, and defection of key people and customers. It may lead to the loss of the support of key stakeholders at a time when that support is needed the most. Inadequate Attention to People Issues Not giving sufficient attention to people issues during due diligence process may prove costly later on. While lot of focus is placed on the financial and customer capital aspects, not enough attention is given to aspects of human capital and cultural audit. Well conducted HR due diligence can provide very accurate estimates and can be very critical to strategy formulation and implementation. 14.   Expecting Results too quickly Immediate results can never be expected except those recorded in red ink. Whirlpool ran up a loss $100 million in its Philips white goods purchase. R.P.Goenk&apos;s takeovers of Gramaphone Company and Manu Chhabria&apos;s takeover of Gordon Woodroffe and Dunlops fall under this category.
  • 31st Oct Complete

    1. 1. Corporate restructuring 31 st October 2009
    2. 2. Valuation Techniques Market based methodologies Intrinsic valuation measures Relative company valuation Discounted Cash Flow (DCF) Dividend Yield / Dividend Growth Adjusted Book Value
    3. 3. Adjusted Book Value <ul><li>Valuation approach based on the market value of assets and liabilities held by a company </li></ul><ul><li>Typical use is for property companies and investment companies… and when company being valued is likely to be liquidated </li></ul><ul><li>Often used as a cross-check for other valuation methods: </li></ul><ul><ul><li>Indicates minimum acceptable value to the seller </li></ul></ul><ul><ul><li>Comparing Price: Book ratios </li></ul></ul><ul><ul><li>Asset backing to a valuation (measure of security) </li></ul></ul><ul><ul><li>Basis for computing goodwill (DCF/Earnings – NAV) </li></ul></ul>
    4. 4. Dividend Valuation <ul><li>Valuation approach based on capitalising the dividend streams received by an investor and expected growth thereof </li></ul><ul><li>Mostly used for ‘pure’ investments where the primary value driver is the dividend stream </li></ul><ul><li>… . therefore methodology is typically used when valuing Minority Shareholdings </li></ul><ul><li>Value seen as net present value of future dividend streams </li></ul>
    5. 5. Relative company valuation
    6. 6. Relative company valuation
    7. 16. Some exercise <ul><li>Trailing and forward multiples </li></ul><ul><li>Outliers </li></ul>
    8. 24. DCF Approach <ul><li>Valuation approach based on discounting projected cashflows to today’s values </li></ul><ul><li>By far, the most common methodology and used where the conditions for using capitalised earnings cannot be met i.e </li></ul><ul><ul><li>erratic cash flow patterns </li></ul></ul><ul><ul><li>abnormal (irregular) growth patterns </li></ul></ul><ul><ul><li>large variations in capex or working capital </li></ul></ul><ul><ul><li>expected significant variations in gearing structure </li></ul></ul><ul><ul><li>asset valued has a finite life </li></ul></ul>
    9. 25. DCF Approach <ul><li>DCF approach is based on FCF – cash flow available to debt and equity investors </li></ul><ul><li>EBITDA </li></ul><ul><li>- Taxation (unlevered) </li></ul><ul><li>+/- Changes in working capital </li></ul><ul><li>- Capital Expenditure </li></ul><ul><li>= Free Cash Flow </li></ul>
    10. 26. Valuation Road Map What are we valuing? Mainly asset based company? Minority Shareholding? Y N Adjusted book value Consistent dividend stream? Y Dividend Valuation Mature business with consistent past results, constant growth and no major changes expected? Relative valuation N N Y Y Discounted Cash Flow N
    11. 27. M&A
    12. 28. Distinction between Mergers and Acquisitions   <ul><li>Although they are often uttered in the same breath and used as though they were synonymous, the terms merger and acquisition mean slightly different things.  When one company takes over another and clearly established itself as the new owner, the purchase is called an acquisition . From a legal point of view, the  target company ceases to exist, the buyer &quot;swallows&quot; the business and the buyer's stock continues to be traded.  In the pure sense of the term, a merger happens when two firms, often of about the same size, agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a &quot;merger of equals.&quot; Both companies' stocks are surrendered and new company stock is issued in its place. For example, both Daimler-Benz and Chrysler ceased to exist when the two firms merged, and a new company, DaimlerChrysler, was created.  In practice , however, actual mergers of equals don't happen very often. Usually, one company will buy another and, as part of the deal's terms, simply allow the acquired firm to proclaim that the action is a merger of equals, even if it's technically an acquisition. Being bought out often carries negative connotations, therefore, by describing the deal as a merger, deal makers and top managers try to make the takeover more palatable.  </li></ul>
    13. 29. Mergers <ul><li>Type of mergers: Mergers appear in three forms, based on the competitive relationships between the merging parties. </li></ul><ul><li>In a horizontal merger , one firm acquires another firm that produces and sells an identical or similar product in the same geographic area and thereby eliminates competition between the two firms. </li></ul><ul><li>In a  VERTICAL MERGER , one firm acquires either a customer or a supplier. </li></ul><ul><li>In a Conglomerate mergers encompass all other acquisitions, including: </li></ul><ul><li>- pure conglomerate transactions where the merging parties have no evident relationship (e.g., when a shoe producer buys an appliance manufacturer), </li></ul><ul><li>- geographic extension mergers , where the buyer makes the same product as the target firm but does so in a different geographic market (e.g., when a baker in Chicago buys a bakery in Miami), and </li></ul><ul><li>- product-extension mergers , where a firm that produces one product buys a firm that makes a different product that requires the application of similar manufacturing or marketing techniques (e.g., when a producer of household detergents buys a producer of liquid bleach). </li></ul><ul><li>Congeneric mergers occur where two merging firms are in the same general industry, but they have no mutual buyer/customer or supplier relationship, such as a merger between a bank and a leasing company. </li></ul>
    14. 30. Synergy <ul><li>It is the magic force that allows for enhanced cost efficiencies of the new business. Synergy takes the form of revenue enhancement and cost savings. By merging, the companies hope to benefit from the following:  </li></ul><ul><li>Staff reductions - As every employee knows, mergers tend to mean job losses. Consider all the money saved from reducing the number of staff members from accounting, marketing and other departments. Job cuts will also include the former CEO, who typically leaves with a compensation package.  </li></ul><ul><li>Economies of scale  - Yes, size matters. Whether it's purchasing stationery or a new corporate IT system, a bigger company placing the orders can save more on costs. Mergers also translate into improved purchasing power to buy equipment or office supplies - when placing larger orders, companies have a greater ability to negotiate prices with their suppliers.  </li></ul><ul><li>Acquiring new technology - To stay competitive, companies need to stay on top of technological developments and their business applications. By buying a smaller company with unique technologies, a large company can maintain or develop a competitive edge.  </li></ul><ul><li>Improved market reach and industry visibility - Companies buy companies to reach new markets and grow revenues and earnings. A merge may expand two companies' marketing and distribution, giving them new sales opportunities. A merger can also improve a company's standing in the investment community: bigger firms often have an easier time raising capital than smaller ones. </li></ul>
    15. 31. Doing the deal <ul><li>Start with an offer or begins with the acquiring company carefully and discreetly buying up shares in the target company, or building a position. </li></ul><ul><li>Working with financial advisors and investment bankers, the acquiring company will arrive at an overall price that it's willing to pay for its target in cash, shares or both.  </li></ul><ul><li>Open offer </li></ul><ul><li>The Target's Response   Once the tender offer has been made, the target company can do one of several things:  </li></ul><ul><li>Accept the Terms of the Offer  - If the target firm's top managers and shareholders are happy with the terms of the transaction, they will go ahead with the deal.  </li></ul><ul><li>Attempt to Negotiate  - price, job security </li></ul><ul><li>Execute a Poison Pill or Some Other Hostile Takeover Defense </li></ul><ul><li>Find a White Knight </li></ul><ul><li>Regulatory issues </li></ul><ul><li>Closing the deal – sha & spa, exchange of money or stock </li></ul>
    16. 32. Doing the deal <ul><li>When a company is on offer? </li></ul>
    17. 33. Regulatory Issues <ul><li>MRTP : Monopolies and Restrictive Trade Practices Act </li></ul><ul><li>- Historically, competition in India has been regulated by the MRTP Act, which is in force since 1970. The primary purpose of the MRTP Act is to curb unfair, restrictive and monopolistic practices  </li></ul><ul><li>- However, to promote competition and to promulgate a modern competition law, Government constituted a committee in 1999, based on the recommendations of which, the Competition Act, 2002 was enacted and notified in January 2003 and the Competition (Amendment) Act, 2007 was enacted in September 2007. </li></ul><ul><li>- The Competition Commission of India was established in October 2003 under the Competition Act, 2002. I </li></ul>
    18. 34. Three Stages of a Merger
    19. 35. Reasons for failure <ul><li>Excessive premium </li></ul><ul><li>Size Issues </li></ul><ul><li>Lack of research </li></ul><ul><li>Diversification </li></ul><ul><li>Lack of Previous Acquisition Experience </li></ul><ul><li>Poor Cultural Fits </li></ul><ul><li>Poor organization fit </li></ul><ul><li>Striving for Bigness </li></ul>
    20. 36. Reasons for failure <ul><li>Poorly Managed Integration </li></ul><ul><li>Failure to Set the Pace for Integration </li></ul><ul><li>Ego Clash </li></ul><ul><li>Over Leverage </li></ul><ul><li>Expecting Results too quickly </li></ul>

    ×